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 There is no evidence that Sumner Redstone is considering replacing
Dauman. But the fact that Shari Redstone has a more secure position
on the seven-person trust, which has not previously been reported,
could embolden her in efforts to wield more influence at Viacom as
it struggles with falling ratings.
Shari Redstone, who sits on Viacom's board, voted against Dauman's
elevation to executive chairman of Viacom to replace her father in
February, arguing that a member of the Redstone trust should not
serve as executive chair of Viacom or CBS <CBS.N>, the other media
company majority owned by her father. Sumner Redstone supported
Dauman taking the new role.
A spokesman for Dauman and Viacom declined to comment. Shari
Redstone declined to comment through a spokeswoman. Leah Bishop,
Redstone's estate lawyer at Loeb & Loeb, did not reply to requests
for comment.
The matter of standing on Redstone's trust may end up being moot. If
Redstone dies or is incapacitated and the trust takes effect, the
only way a trustee can be replaced is if they die or if the
beneficiaries of the trust - Redstone's five grandchildren - appeal
to a judge. That effectively puts Shari Redstone and Dauman on a
level footing.
But while Sumner Redstone is alive and able, and he retains ultimate
power over his empire, it raises the question of who has the most
influence over him.
Shari, who at times has been estranged from her father, has recently
been spending 30-40 percent of her time with him at his Los Angeles
mansion, a spokeswoman for her said in response to a question.
In April, Redstone gave Shari and a friend of the family authority
over his health care if he becomes incapacitated, sources have told
Reuters, replacing Dauman and Viacom's chief operating officer,
Thomas Dooley.
At the same time, Dauman still has deep ties to Sumner Redstone, who
has called Dauman "the wisest man I've ever known" and "a great
friend." The two men have worked together for more than 30 years.
Dauman said in a court declaration late last year that he spoke with
Redstone several times a week over the phone and visited him
monthly.
BALANCE OF POWER UNCLEAR
The Sumner M. Redstone National Amusements Inc Trust owns about 80
percent of Redstone's privately held movie theater company, National
Amusements Inc, which in turn owns 80 percent of the voting rights
in both Viacom and CBS.
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After Redstone dies or is incapacitated, the trust will determine all matters
that come to a shareholder vote at both companies, including potential mergers
or acquisitions.
It is unclear whether Shari Redstone or Dauman have the majority support among
the members of the trust, which include Shari's son, lawyer Tyler Korff; and
David Andelman, another lawyer who has worked with the Redstone family and is on
the CBS board.
The other members of the trust are George Abrams, who also sits on the Viacom
board; Norman Jacobs, Sumner's divorce lawyer; and Leonard Lewin, an attorney
who represented Redstone's first wife, Phyllis, in her divorce from Sumner.
Calls and emails to the trustees were not returned.
Viacom, like other media companies, has suffered from falling ratings at its
cable networks as younger viewers migrate to online and mobile video.
Dauman has taken steps to woo advertisers by using data to better target
commercials. Last month the company renewed a multi-year distribution contract
with satellite TV provider Dish Network Corp.
Investors, including Mario Gabelli, the second-largest owner of voting shares of
Viacom, have welcomed Dauman's plans to sell a minority stake in movie studio,
Paramount. Dauman said last month he expects to announce a Paramount deal by end
of June.
(Reporting By Jessica Toonkel in New York; Additional reporting by Lisa Richwine
in Los Angeles; Editing by Eric Effron and Bill Rigby)
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